I altered the aforementioned instructions a bit, so as to "tell the truth" based on the details you've provided, (as best as I can interpret them) and it still generates a SCH C. So based on the details, the IRS would consider it SE income. So that's why I still stand on my statement of the income being incorrectly reported to the IRS by the payer, and incorrectly reported to you by the payer.
Basically, when I answer the questions posed by the program for the box 3 income, and answer them as truthful as I can, the IRS considers that I received that income for providing a product or service in exchange for it, and I'm expected to pay the additional SE tax on it, via the SCH C.
What document should have been issued, is dependent on how the business is structured. For example, if it's an S-Corp then most likely the correct form is the 1120-S K1 with your share of payout reported to you in box 5, 7 or 8.
See the form I believe it should have been reported to you on, at <a rel="nofollow" target="_blank" href="
https://www.irs.gov/pub/irs-pdf/f1120ssk.pdf">https://www.irs.gov/pub/irs-pdf/f1120ssk.pdf</a> (Assuming the business is structured as an S-Corp, which is most likely)
